Obamacare Penalty No Longer in Place and Now Short-Term Health Plans Are Flying Off the Shelf at BenaVest

With the ACA tax penalty out the window, many more options have been opened up to the masses.

​​​With short-term health insurance plans having its returned 364-day limit alongside being up to 70% less expensive than qualified Obamacare ACA Marketplace Plans for some individuals, "it seems to be a more feasible option for young adults that are healthy and people with medium to high income that are healthy," says Adelfa Arriaga, a BenaVest Insurance Agent. Unlike plans on the marketplace, short-term plans don't look at income as a factor for premium costs.

With some short-term plans adding the renewable option, its a more attracting offer for most, being that they can renew their coverage for up to 36 months without additional medical underwriting. Although the initial short-term plan can only last less than 12 months, this renewable option attached to certain plans can cause them to be more pricey.

People can shop for health insurance alternatives like short-term plans without the fear of the tax penalty.

Adelfa Arriaga, Health insurance agent

The final rule for the changes for short-term plans include the following key points:

  • Initial terms for short-term plans can go up to 364 days.
  • Disclosures must be present with short-term plans to help consumers understand the difference between short-term plans and major medical (ACA) health insurance.
  • Renewable short-term plans (limited duration) are accessible as long as the final term length doesn't exceed 36 months total.

Though these initial rules are stated, HHS made it clear that each individual state can alter the set of rules it’s up to each state to set rules applicable to short-term plans sold within the state. With that, many states are taking deviated approaches on short-term plans that either clearly expands the access of short-term plans and make them profitable for the state, or the contrary, stripping the access of short-term plans completely for health insurance consumers.

The following is a comparison example of Obamacare Health Plans vs. Short-term Health Plans as of today:

  • A healthy single 37-year-old male making $35,000 in Broward County, FL may get a bronze plan with a Max Out-of-Pocket of $7,900 for about $167.03  as their most affordable option with Obamacare.
  • A healthy single healthy 37-year-old male making any amount of money in Broward County, FL may get a 364-day short-term health plan for about $57.30 a month with a $12,500 deductible and up to $250,000 in coverage as an affordable option with Short-term Health Insurance.  This will depend on whether or not he may be able to get passed strict underwriting that some short-term carriers have in place.
  • Consumers should take note that qualified ACA / Obamacare Plans are Major Medical Plans that do not have limits on the amount of catastrophic coverage in most cases, while Short Term Medical Plans do have limits.

Without the Obamacare Tax Penalty for 2019 coverage, Adelfa Arriaga, a health insurance agent, says "People can shop for Health insurance alternatives like short-term plans without the fear of the tax penalty whereas before that would have affected the outcome" which was a minimum $695 per year. Consumers that jumped the gun and didn't have a qualified health plan throughout 2018 may still have to pay the penalty this upcoming tax season in 2019 on their income for 2018.

Source: BenaVest